Four IT Spend Questions in Need of Answers

Four IT Spend Questions in Need of Answers

Effective IT management is not necessarily about spending less – or more; it’s about allocating dollars, resources, and talent wisely and monitoring for benefits realization on many fronts.

Surprisingly, many IT organizations do not harvest the data nor have disciplines in place to readily answer a few seemingly easy questions about their IT investments:

  1. Where are our IT dollars, resources, and talent deployed today?
  2. Do we have the data and processes in place to present a business view of IT investments?
  3. How do our IT resource allocations, costs, and performance compare to others in the industry, especially top performers?
  4. Are our IT investments aligned to business objectives?

Although closing in on the answers may be a never-ending journey, Martha Hein, one of ITeffectivity’s Program Directors and a Cost Management extraordinaire, outlines the steps you can take to get there.

Let’s get started!

1. Where are our IT dollars, resources, and talent deployed today?

Running the Business of IT depends on the timely availability, analysis, and understanding of quantifiable IT financial and operations data. To demonstrate benefits realization and the value being delivered to the business, IT must first be able to communicate what services are being provided, at what cost and for what return. The first step to answering this question is to compile your data into a scalable model. Data sources include extracts from your financial systems (actual spend by GL and Cost Center, fixed asset registers, prepaid services balance sheets, Purchase Orders, etc.), HR, Payroll and Timekeeping systems as well as IT systems (Active Directory, CMDB, Infrastructure and Applications Monitoring, Service Ticketing, etc.).

Data models are useful tools to measure how your dollars, resources, and talent are being spent today and may elucidate how these might be more profitably spent tomorrow. Data models and taxonomies vary, but the Technology Business Management (TBM) Council1 provides an excellent public domain example of the inputs required to gather the foundational data necessary to answer this question.

This data provides the first building blocks required for transparent fact-based communications between IT and business leaders.

2. Do we have the data and processes in place to present a business view of IT investments?

As stated above, the IT Financial and IT Functional views of your IT investments are the first building blocks used for running the Business of IT. The endgame, however, is to have a clear Business view of IT investments. To create a Business view, you must reframe IT investments from a business perspective. Arriving at a Business view requires additional analysis of the above data and may require other inputs.

Business leaders are interested in achieving operational excellence and realizing profitable growth, innovation, and transformation for their organizations. To deliver optimal value to the businesses they serve, IT organizations must proactively manage their investments and services portfolios to become enablers, or better yet, drivers of these business objectives. From a Business perspective, running effective and efficient day-to-day IT operations is merely to provide a commodity service.

Demonstrate you do more than keep the lights on by enhancing your data model to enable you to report on IT investments along business dimensions.

  • Business partners are often not aware of the Total Cost of Ownership (TCO) of a given IT business service, the full price tag to implement, or the support cost of the technology for a given business capability. Develop a Bill of IT to provide a view of your IT investment portfolio that reveals TCO by business service and/or Line of Business. Help your business partners understand the cost drivers (without burdening them with the details of all the moving parts under the IT hood). Ideally, you understand the cost components well enough to be able to provide counsel on how to favorably impact cost without adversely impacting service levels or creating undue risk. For example, is business demand commensurate with business value? Can you move away from Tier 1 storage or reduce the number of user application licenses without impacting productivity?  
                                                                                                                             
  • Demonstrating return on investments requires that you identify the criteria that will be used to measure benefits realization and then establish a baseline against which to measure outcomes. Work with your business partners to define criteria and baselines, then implement on-going monitoring of benefits realization based on agreed-upon measures.

3. How do our IT resource allocations, costs, and performance compare to others in the industry, especially top performers?

Measuring your cost and service performance against industry benchmarks can uncover opportunities for efficiency improvements, thus allowing you to do more with less. Or, more of what is profitable, less of what is marginal, and none of what is just plain wasteful. You will use the data gathered to answer the above questions and simple arithmetic to answer question No. 3. Total IT spend divided by Corporate Revenue equals IT Cost as Percent of Revenue. IT Dollars spent divided by Units supported/produced equals Unit Cost. Setting up the formulas for performance measures may be trickier and the results may not be as objective, but is still relatively uncomplicated. You meet or exceed your Service Level Agreements ##% of the time. On average, you get either an X or a Y on Customer Satisfaction Surveys.

As an important caveat, industry benchmark data typically provides averages. When put in context, there may be legitimate business-driven reasons why your organization’s results vary from others in the industry. For example, if your business strategy is to pursue aggressive growth through Mergers and Acquisitions, you will need to funnel resources from Run the Business and Transform/Innovate the Business to Grow the Business and/or accept a higher cost of IT as a percent of Revenue. In another example, if you are aggressively pursuing rapid innovations in your product R&D pipeline, you may want to overlook typical storage costs in favor of being able to model and readily access every permutation of promising molecular structures.

4. Are our IT investments aligned to business objectives?

Start with an easy top-down mapping exercise. Utilize your organization’s core business strategies. Ideally, IT leadership was at the table when these were defined. Identify the core competencies2 and specific Business and IT capabilities that are required to support the strategy. Map the IT programs that support each of the pillars of the strategy.

In Closing

It is difficult to know with any degree of certainty if your IT investments are aligned to your business objectives until you have at least preliminary answers to the previous questions. Do not allow a possible lack of a comprehensive data set to detract from taking proactive action.

We will cover additional aspects of running the “Business of IT” in future articles. We welcome your feedback on what has worked well for your organization and where you continue to feel pain points.

Until next time – we are here if you have questions or want to talk!

Martha and Mary

Mary Patry 
IT Executive Advisor and Leadership Coach   
 480.393.0722 (AZ) 
 Mary.Patry@iteffectivity.com 
LinkedIn: http:// www.linkedin.com/in/mleonardopatry 

Let’s Talk sponsored by ITeffectivity.com an IT Executive Coaching and Advisory practice targeting CIO’s challenge of leading and delivering business solutions with a focus on effective people and process capabilities. Discover the possibilities by scheduling a complimentary strategy session with Mary Patry. 

It is GOOD for YOU to Show You Care

It is GOOD for YOU to Show You Care

A few years ago, I observed a new IT executive snap at his lead technical architect about what did not seem to be a major transgression. Later in the day, I witnessed an even more aggressive and public criticism of a project manager during a quarterly program review. I can still see the embarrassment and devastation in the project manager’s eyes. More importantly, the silence in the room screamed of the intimidation felt by everyone present.  
 
I pulled him aside in private after the meeting and asked if everything was okay. He was a smart guy with a career built on his technical prowess. I did not know him well, so I wanted to see if I could be of help and give him the benefit of my understanding. You can only imagine my surprise when he replied in a cheerful tone that everything was great. I did not let it go. My reply was something to the order of “Really?” 

Upon further conversation, I came to understand that his gruffness was a purposeful put on. How would his team respect him if he was “nice?” In his mind, they would see him as a pushover. When in fact, his team lived in fear of his outbursts.  

In the beginning, his blustering behavior appeared to be working for him in the eyes of his leadership. After all, his reputation was built on innovative solutions and delivery of his commitments. It took poor employee engagement ratings and high turnover before the organization recognized his behavior as toxic. Fortunately, they provided him executive coaching, and he was astute enough to realize the need to change. 

This was certainly a rare worst-case scenario. Or was it?  

Picture this; it may bring the answer to life:  Do you know of any highly intelligent, very technical person who isn’t socially adept and stuck in their career? A lack of EQ is often the reason you find many people with advanced degrees struggling to move up the ranks on the job. 


How is Emotional Intelligence related to my IQ?

In straightforward terms, your IQ is what you know. It is an assessment of your cognitive skills such as literacy, numeracy (yes is a word, I looked it up), and spatial awareness. It is easy to recognize someone with a high IQ by their language, mathematical, and analytical skills.

EI is your ability to manage your emotions and reaction to other people. EI is about how you feel and how others feel about you. It is that soft squishy stuff many IT professionals would prefer to avoid.

Until these wonderfully technically intelligent team members recognize the limiting factors of a low EI, they may never see the need or want to improve.

Part of the challenge with understanding EI is that it is a modern concept. The original theory of emotional intelligence as identified in the early 1990s by two American Psychologists, Peter Solovey and John Mayer defined it as a learned ability to perceive, understand, and express our feelings and to control our emotions so that they work for us.

The concepts were further expanded and popularized by David Golemen1 in his 1995 book Emotional Intelligence. In his best-seller, he writes that Emotional Intelligence:

“refers to the capacity for recognizing our own feeling and those of others, for motivating ourselves, and for managing emotions well in ourselves and in our relationships.” 

Since then dozens of books, TedTalks, and YouTube videos have been published on the subject of EI. The bottom line is that knowledge of Emotional Intelligence enables you to identify what feels good and what needs to change. Maintaining and developing emotional awareness and sensitivity helps you to stay positive. Positive attitudes result in a much higher level of motivation for yourself and others.

How does Emotional Intelligence impact my career?  

Unless you are in a position of never having to interact with other people, weaknesses in your emotional intelligence can seriously harm your career. It most certainly will hamper your career progression.

Center for Creative Leadership research confirms the most common causes of career derailment are predictable: 

  • Difficulty adapting to change (the most frequent cause of derailment)
  • Difficulty building and leading a team
  • Failure to deliver business results
  • Lacking a broad, strategic orientation
  • Problems with interpersonal relationships

Another study by the Chartered Institute of Personnel and Development showed that as much as 80% of the reason careers are derailed was due to weaknesses in Emotional Intelligence. Their study found that the three primary reasons for career failure were; poor interpersonal skills (e.g. oral and written communication, listening), not being a good team player (e.g. non-collaborative, loner) and not adaptive to change (i.e. at best resists, at worst sabotages change initiatives).

Both studies point back to EI characteristics.

To bring this to life, take a moment to reflect on a manager, leader, or peer who you believe to be successful.  What qualities do they possess that you think helped contribute to their success? Then take a moment to reflect on the managers, leaders, and peers that you have avoided. It should not be hard for you to find the contrasts.

If you have high levels of EI, average intellectual abilities, and excellent technical skills, you are well placed for career success. Good indicators of career success are:

  • Ability to manage your reaction to frustrations
  • Ability to deal with a diverse range of issues
  • Ability to manage your own emotions
  • Ability to manage your social skills.
    NOTE: EI refers to managing your own emotions, not the feelings or behaviors of those around you.

Nearly all jobs require people to work together effectively. Employees with high emotional intelligence are highly sought after. The most effective IT managers are those with high emotional intelligence, despite average or less than average technical skills or intellect.

Can Emotional Intelligence be learned? 

Yes, the good news is that anyone can grow and develop their EQ through learning and practicing. With conscience focus, our EQ will change the more we build understanding of our feelings and emotions. One of the neat things about humans is that working to change our attitudes changes our emotions as well. How we reacted to a situation 3, 5 or 10 years ago will be very different from how we react today. Think about a negative situation in your past, name the emotions felt and the resulting outcome. How would you have felt or reacted if it was happening today? Have the emotions changed?

There are self-improvements tactics you can take to evolve your EQ. The first step is a solid mindset that you need and want to build your EQ. Mindset is part belief and part attitude. A mindset refers to whether you believe qualities such as intelligence and talent are fixed or changeable traits. You either have a fixed mindset or a growth mindset. People with a fixed mindset believe their qualities and capabilities are fixed and unchangeable. Those with a growth mindset believe that their capabilities can be developed and strengthened by way of hard work, practice and commitment. I firmly believe that you grow your EQ if you adopt a growth mindset. Changing your mindset takes work. Often, it also takes help from a coach or an event that triggers the possibilities.

Once you know and want to change, an excellent first step is to keep a journal to record and enable you to reflect on your experience. Reflecting and consistently recording raises your self-awareness resulting in improvements to your self-management and productive behaviors.

You should also actively seek unbiased and candid feedback. You could start with a trusted colleague or a close friend. Depending on your relationship, your life partner can also be a great best accountability partner.

Honest and candid feedback will help you to identify and see blind spots that may have been the root cause of your challenges in the past. You can also work with a coach to set goals for improving your Emotional Intelligence and receive ongoing support as you make progress.

In Closing

I knew going into this article that the most I could do was to introduce you to the importance of EI as an IT professional with the hopes of inspiring you to learn more. If I have not inspired you enough, I leave you with a quote from Emotional Intelligence by David Goleman:

“People with well-developed emotional skills are also more likely to be content and effective in their lives, mastering the habits of mind that foster their own productivity; people who cannot marshal some control over their emotional life fight inner battles that sabotage their ability for focused work and clear thought.”

Improving your Emotional Intelligence is a gratifying process. It takes patience and commitment to change. It is a personal investment that will transform your career and quality of life outside of work. I promise.

Until next time – I am here if you want to talk.

Mary

Mary Patry 
IT Executive Advisor and Leadership Coach   
 480.393.0722 (AZ) 
 Mary.Patry@iteffectivity.com 
LinkedIn: http:// www.linkedin.com/in/mleonardopatry 

Let’s Talk sponsored by ITeffectivity.com an IT Executive Coaching and Advisory practice targeting CIO’s challenge of leading and delivering business solutions with a focus on effective people and process capabilities. Discover the possibilities by scheduling a complimentary strategy session with Mary Patry. 

You are invited! Learn the Three Phases to IT Strategy Development January 29, 2020

You are invited! Learn the Three Phases to IT Strategy Development January 29, 2020

I get it; the Holidays are busy.  The last thing on your mind was reading a business-related email or blog Christmas Eve.  In case you missed it – here it is again:  

https://www.iteffectivity.com/blog-1/2019/12/23/a-gift-to-kick-off-2020/

I am sending follow up to assure you don’t miss an opportunity to join us on January 29 from 1-3 MST, where I will walk registered participants through our IT Strategy Planning template.  At the end of the session, all participants will receive an editable copy of the template.  

To register:  IT Strategy Planning Webinar 

Registration is complimentary and limited.  I hope to see you there! 

Until next week!

Mary

Mary Patry 
IT Executive Advisor and Leadership Coach   
 480.393.0722 (AZ) 
 Mary.Patry@iteffectivity.com 
LinkedIn: http:// www.linkedin.com/in/mleonardopatry 

Let’s Talk sponsored by ITeffectivity.com an IT Executive Coaching and Advisory practice targeting CIO’s challenge of leading and delivering business solutions with a focus on effective people and process capabilities. Discover the possibilities by scheduling a complimentary strategy session with Mary Patry.